The chain has seen sales rise as squeezed consumers hunt for a bargain, including well-heeled shoppers increasingly on the look-out for savings.

Since opening its first store in Burton-on-Trent in 1990, Poundland has grown to nearly 500 outlets in the UK and plans to double that number. It also operates more than 30 stores under the Dealz brand in Ireland.

Founder Steve Smith netted £50 million from selling his stake in the business more than a decade ago. US private equity firm Warburg Pincus bought the group for £200 million and now looks set to net a windfall as it floats for nearly four times that value.

The retailer, which sells goods such as Cadbury’s chocolate and Fairy washing-up liquid for £1, will now rub shoulders with some of the City’s most well-established names as it lists on the London Stock Exchange.

Poundland describes itself as the largest single-price value general merchandise retailer in Europe, with revenues of £880.5 million in the last financial year to the end of March, and underlying earnings of £45.5 million.

Revenues for the nine months to the end of December were £758.3 million, and underlying earnings £45.2 million.

The retailer says the value general merchandise market in which it operates is one of the fastest growing segments in UK retail, benefiting from a “structural shift in consumer behaviour towards value”.

It says around 22% of shoppers now come from the wealthiest section of the population.

Poundland plans to open a new 350,000 sq ft distribution centre in Harlow, Essex, later this year as it continues its growth.

There are plans to expand into Europe, with a trial of up to 10 Dealz stores - which sells most products for 1.49 euros (£1.22) - targeted to open in Spain over a two-year period, while the group said there was also potential for online sales.

Chaired by former Tesco executive Andrew Higginson, the group has appointed a raft of new directors as it prepares for the float, including former Carpetright chief executive Darren Shapland.

Chief executive Jim McCarthy said: “The value retail sector has been through a period of profound change in scale, customer perception and financial performance.

“The sector is now a mainstream feature of the UK retail market and Poundland has been a central architect of that change. Our single price point and our amazing value are appealing to an increasingly broad section of shoppers.”

Directors of the company will be able to cash in part of their stock as part of the flotation.

Poundland r served more than seven million shoppers in the peak Christmas trading week and said it saw a record performance in the five weeks to January 5.